ECONOMIC OUTLOOK 071718
By Isacc Cohen*
The International Monetary Fund (IMF) released in Washington, this week, the updated version of its flagship publication, the World Economic Outlook. http://www.imf.org/en/Publications/WEO/Issues/2018/07/02/world-economic-outlook-update-july-2018?cid=em-COM-123-37436
Global economic growth projections for 2018 and 2019, at 3.9 percent, remain the same as those released last April. However, in the advanced economies the expansion has become “less even,” with less growth projected for the euro area, Japan and the United Kingdom, while relatively faster growth continues in the US economy. Unevenness is also found among emerging market and developing economies. Downward revisions were made on the growth projections for India and for the major South American economies, Argentina and Brazil. The economies of Latin America and the Caribbean are projected to grow 1.6 percent in 2018 and 2.6 percent in 2019, while oil exporters are benefitting from increased oil prices.
The Fund estimates that the balance of risks has tilted to the downside in the near and medium term. For instance, signs of inflation in the United States can lead the Federal Reserve to faster interest rates hikes, intensifying pressures among emerging market economies derived from a stronger dollar and capital outflows. However, according to the IMF’s Economic Counselor and Director of Research Maurice Obstfeld, the escalation of current trade tensions “is the greatest near-term threat to global growth.”
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.